Amazon Controversies

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mazon.com is one of the world's largest technology companies that focuses on e-commerce, cloud computing software, and streaming. Amazon is considered one of the Big 5 tech companies in the United States with their 2020 revenue exceeding 386 billion dollars. Amazon was founded in 1994 with $10,000 by Jeff Bezos in his garage in Seattle. By 1999, Amazon had become the largest online retailer in the US. As Amazon has continued its rapid expansion, this expansion has been met with some pushback and controversy. From accusations of anti-competitive actions, mistreatment of employees, and trying to bypass government legislature, the e-commerce giant has had its fair share of altercations. Bezos served as Amazon's CEO before finally stepping down in 2021.

People in India protesting Amazon and Jeff Bezos

History

Jeff Bezos founded Amazon in his garage in Seattle after leaving his job in finance. Bezos set out to build the world's first online bookstore. In the first 30 days of the company, Amazon.com sold books in 46 different countries, and in two months reached $20,000 in sales per week. The company went public in 1997 and raised $54 million, and within two years outgrew competitors despite analysts concerns. At the end of 1999, Amazon had shipped over 20 million items to over 150 countries. In 2000, Amazon started to allow independent sellers to sell items alongside Amazon's own listings. In 2003, the company turned a profit for the first time. In 2005, Amazon released its Amazon Prime membership which allowed members to pay a subscription for free shipping and access to its music and video streaming services, and by 2019 it was the second largest paid membership program in the world. In 2006, Amazon released its cloud computing service called Amazon Web Services. In 2007, Amazon released its Kindle e-reader. In 2011, released the Kindle Fire its tablet. Amazon created a video streaming service in 2006 and a studio that develops movies and TV shows in 2010. Finally, they created a fine art marketplace in 2013. Amazon made two of its biggest acquisitions when it Acquired Zappos and Whole Foods. In 2015, Amazon beat out Walmart as the world's most valuable retailer.

Jeff Bezos

Early Life

Jeff Bezos was born on January 12, 1964, in Albuquerque, New Mexico. His mother, Jacklyn Gise Jorgensen, was a teenager when she had Jeff and his biological father, Ted Jorgensen left after being married for less than a year. When Bezos was 4 years old, his mother remarried Mike Bezos who is a Cuban immigrant. Bezos recalls messing with electrical contraptions around his house as a child. He moved to Miami with his family as a teenager and graduated valedictorian of his high school.

College and Early Career

Bezos graduated summa cum laude from Princeton University where he studied computer science and electrical engineering.

After graduating, Bezos worked on Wall Street at firms including Fitel, Bankers Trust and D.E. Bezos became D.E. Shaw's youngest vice president ever. It was at this job that Bezos met his wife, MacKenzie. Ultimately, Bezos and his wife decided to leave their finance jobs and move to seattle to found Amazon.

Time as CEO

During Bezos's tenure as CEO, Amazon become the #1 ecommerce site in the world and makes up for over 45% of ecommerce sales. He launched Amazon Prime which has become the world's second largest subscription service behind only Netflix. In addition, Amazon launch Amazon Web Services which is the leader in the cloud computing industry. Amazon launched the kindle e-reader which lead Amazon's gadget business to be the third largest in the US. Amazon acquired Zappos and became the world's largest seller of shoes and clothing. Amazon acquired Whole Foods and became the fifth largest seller of groceries in the US.

In 2018, Jeff Bezos became the richest man in the world. During his tenure, Bezos purchased businesses like Zappos, Whole Foods and The Washington Post.

In 2021, Bezos stepped down as CEO of Amazon to focus more on his space company, Blue Origin.

Philanthropy

Bezos also started the Day One Fund which focuses on "funding existing non-profits that help homeless families, and creating a network of new, non-profit tier-one preschools in low-income communities." He later also created the Earth Fund to try and combat the effects of climate change.

His first multi-billion dollar philanthropic initiative came in 2018 with the Bezos Day One Fund, which aims to establish a network of nonprofit preschools and aid organizations working with homeless people. To date, Bezos has given just over $300 million of the $2 billion he’s pledged to the initiative.

In 2018, it was reported that Bezos had was one of the top billionaires that had not committed to the Giving Pledge. This is the pledge that billionaires like Bill Gates, Warren Buffet and Bezos's now ex-wife MacKenzie Scott have commited to in order to donate over half of their wealth.

Personal Life

Bezos met his wife, MacKenzie Tuttle, when they worked at D.E. Shaw in NYC. Bezos was as a senior VP and MacKenzie was an administrative assistant. They dated for just three months before getting engaged and married in 1993. Bezos and MacKenzie had four children, three sons and an adopted daughter.

MacKenzie is credited as being an important part of the success of Amazon. She helped create Amazon's first business plan and was the company's first accountant.

In 2019 Bezos and MacKenzie got divorced as details emerged of an affair between Bezos and his now partner, Lauren Sanchez. As part of the divorce settlement, Bezos' stake in Amazon was cut from 16 percent to 12 percent, putting his stake at nearly $110 billion and MacKenzie's at more than $37 billion, making her one of the richest women in the US. She also pledged to give away at least half of her wealth, part of the Giving Pledge made by the Gates and Buffet families.

Controversy

Anti-Competitive

1-Click Patent

Amazon has been criticized for allegedly using patents as a competitive roadblock. The most well-known example is the "1-Click patent". The 1-Click patent was a first of its kind feature that allowed shoppers to enter in their billing, shipping and payment information just once into the system and from then on only click 1 button to order an item.

In December 1999, the Free Software Foundation announced a boycott of Amazon due to their use of the 1-click patent against rival Barnes & Noble's website. In September 2002, the boycott was called off. The company was given a patent on February 22, 2000, for an Internet-based consumer referral system, also known as an "affiliate program." Tim O'Reilly and Charlie Jackson, both industry leaders, spoke out against the patent, and O'Reilly wrote an open letter to Amazon CEO Jeff Bezos, criticizing the 1-click patent and the affiliate program patent, and stated that Bezos was attempting to limit the development of ecommerce. The USPTO ordered a re-examination of the "1-Click" invention on May 12, 2006.

Canada

Amazon has a Canadian website, but up until 2010, they could not have any offices, warehouses, call centers or fulfillment centers in the country because of a law banning foreign booksellers. Instead, Amazon setup warehouses just outside Canada and struck a deal with Canadian postal services. Amazon was eventually sued by the Canadian Booksellers Association claiming that Amazon was attempting to bypass Canadian law. The lawsuit was eventually dropped.

In 2017, Amazon was required to pay over $1 Million by the Competition Bureau for failure to provide transparent pricing. They alleged that Amazon was artificially raising the prices of listings on their site in order to make their other listing prices seem even cheaper.

Apple partnership

In 2018, Amazon and Apple reached a controversial deal regarding who was authorized to sell refurbished Apple products on Amazon. The deal didn’t push third-party sellers off of Amazon entirely, but it set conditions that made it impossible for smaller refurbishers to remain on the platform. Amazon still offers refurbished Apple products sold through the company’s “Amazon Renewed” program. The deal stated that only Apple Authorized Retailers or vendors who purchased $2.5 million in refurbished products from Apple every 90 days, via the Amazon Rewards program, were allowed to sell Apple products on Amazon. The FTC eventually investigated Amazon regarding the deal.

Marketplace participant and owner

Amazon has long been criticized for being both the owner and participant of their marketplace which gives them access to a lot more data than other sellers on the platform. This data can tell Amazon what products to produce and at what price. Meanwhile, other sellers have accused Amazon of slowly increasing the cost to sell on their site. Sellers often have no other option as Amazon is still the leader in the e-commerce space. Amazon has since responded saying that its operation is so massive, the rules are necessary to give customers a quality experience. The company said the health of sellers was a top priority, and that it had invested billions of dollars to support them. It said that about 200,000 sellers surpassed $100,000 in sales in 2018, roughly a 40 percent increase from the year before.

Direct selling

Amazon found itself under fire in the UK in 2008 when they complained about book publishers selling their books at a discount on their own sites. Amazon claimed they should only have to pay the publishers for what they are selling the books at on their own sites and not the retail price on Amazon.

Amazon later drew complaints when they removed titles printed by UK publisher Hachette Livre. This was reportedly to pressure the publisher to lower their prices at a significant discount. Amazon came under criticism for its negotiating tactics, which included preventing customers from being able to pre-order Hachette titles, reducing the discounts it offered on Hachette books and even delaying shipment of some of the publisher’s titles for up to a month.

Price control

In 2010, Macmillan Publishers asked Amazon to honor the new pricing they had worked out with Apple for all of their e-books, raising it from $9.99 to $15. Amazon not only declined but removed all Macmillan books from their site. Eventually amazon reinstated Macmillan’s deal.

In 2014, a group of authors including Stephen King and John Grisham, made public statements on Amazon’s pricing and claimed that Amazon was “harming the livelihood of the authors on whom it has built its business.” They claimed that Amazon was hurting the sales of books and purposely making them nearly impossible to find and purchase.

Removal of competitors' products

In 2015, Amazon announced it was removing AppleTV and Google Chromecasts listings by all merchants. They claimed it was to prevent “customer confusion” as those products did not support Amazon Prime Video. This is in contrast with the fact that Amazon intentionally did not offer its software to Apple and Google for their products. Apple and Google claimed Amazon was trying to hinder the sale of competitor products. Eventually Amazon reached a deal with both of these companies to offer Prime Video on their products. Amazon is also known to suppress the listings of competitor products and promote its own products higher up in search results. This also causes other retailers to spend more money on advertising and SEO on Amazon’s site.

In 2019, PayPal paid $4 billion for Honey which lets users find coupons while shopping online. It works through a browser extension known as a “plug-in” that automatically searches for discounts as customers shop on sites like Amazon. Honey makes a commission off each sale and has ushered in 17 million users. Amazon then began telling shoppers that the browser extension was malware and to install it immediately. .

BookSurge

In 2008, book publishers questioned Amazon’s monopoly status when their publishing division contacted other publishers to let them know they had to sign an exclusive agreement with Amazon to be sold on their site. Publishers were later told that the only Print on Demand (POD) books sold by Amazon would be ones printed by their own company.

Mistreatment of Employees

Union Busting

Historically, Amazon has opposed efforts by workers to organize in trade unions in both the United States and the United Kingdom and has actively engaged in union busting. In 2016, Amazon to posted a “notice to employees” in a warehouse in Virginia, listing out behaviors they would and would not allow with regard to unionizing such as "we will not threaten you with the loss of your job” if you are a union supporter. After the International Association of Machinists and Aerospace Workers accused Amazon of doing that very thing as they pushed to unionize 30 warehouses of technicians in Virginia, the tech-giant felt inclined to post that list. The employee notice caused a unionization effort to fail.

When coronavirus arrived in March 2020, it inadvertently turned Amazon into an essential resource and restructured the firm's relationship with its warehouse workers in the United States. In March 2021, Amazon was under fire at a union vote at a warehouse in Bessemer, Alabama. This was the largest and most viable U.S. labor challenge in the company's history. It was then that 6,000 workers had until the end of the month to decide whether to join the Retail, Wholesale and Department Store Union. They ended up losing the bid by a 2–1 margin.

In December 2021, the regional director of the National Labor Relations Board sought to undo that previous result after a challenge was submitted by the union, allowing workers to hold another vote. This was in response to allegations that Amazon encouraged unfair labor practices during the unionizing process. The RWDSU claimed that the firm embraced an anti-union campaign ahead of the vote that used "text messages sent to workers, notices deriding unions posted in bathrooms, and “captive audience” sessions."

In January 2022, The NLRB accused Amazon of illegally threatening, surveilling, and interrogating workers over union organizing at a Staten Island Warehouse, JFK8. The NLRB's complaint accused Amazon of hiring in a union avoidance consultant in May 2021. In response to this allegation, the NLRB is requesting that Amazon runs "mandatory training sessions" for its supervisors, managers, security guards, and consultants on workers' rights to unionize. They're also insisting that Amazon reads workers their rights aloud in the warehouse and hand out notices outlining their union rights.

In February 2022, the warehouse in Bessemer, Alabama is set to hold a re-run of a union election it held in March 2021. Workers at Amazon's warehouse in Bessemer voted against forming a union, but the NLRB ordered the election to occur again after it ruled Amazon had illegally pressured workers into voting against unionization.

Across the world in Europe, 37 European trade unions co-signed an open letter calling for the European Commission to investigate Amazon, saying the company "has led the raid on workers' rights, using its data-monopoly power to crush efforts by workers to improve their conditions in September 2020. Now it is ramping up its espionage operations". In November 2021, Amazon faced strikes by union-backed warehouse and delivery workers in Europe as part of an international Black Friday protest.

Warehouse Conditions

Amazon has repeatedly come under fire for inhumane conditions in their warehouses. Some have reported to reach temperatures above 100 degrees.

In addition to high temperatures, Amazon warehouse workers are injured at higher rates than those at rival companies. In June 2021, the Strategic Organizing Center published a report stating that in 2020, there were 5.9 serious injuries for every 100 Amazon warehouse workers, which is nearly 80% higher than the serious injury rate at non-Amazon warehouses.

In November 2021, a group of more than 200 public health experts sent a letter to Amazon calling on the company to improve its workplace conditions ahead of the 2021 Black Friday and holiday shopping season. The letter sent to new president and CEO Andy Jassy says that with those hires “creating better working conditions for warehouse workers and delivery drivers has never been more important.”

In almost all of its warehouses, Amazon tracks workers’ every movement inside these large facilities. Employees who work too slowly, or are idle for too long, risk being fired.

In January 2022, two members of Amazon's Labor Union organizing committee at JFK8, the largest of the firm’s four warehouses on Staten Island, spoke out against the conditions and cited "backbreaking work, lack of information about the coronavirus, 60-hour-plus workweeks, 20% of colleagues out with the virus, 10-hour shifts with “mandatory overtime” tacked on, and two- and three-hour commutes."

Working Conditions for Delivery Drivers

Many Amazon drivers have reported working conditions that include: missing wages, lack of overtime pay and intimidation. In addition, drivers reported unrealistic time constraints that lead to speeding and an inability to eat or go to the bathroom. Drivers have described a physically demanding work environment. They feel pressured to drive at dangerous speeds, blow stop signs, and skip breaks and meals to meet the tight deadlines. Traffic and congestion stress them out. They also reported safety violations, wage theft, intimidation, favoritism, and a lack of overtime pay.

Amazon recently introduced an Artificial Intelligence software to monitor and track its employees. This received criticism when drivers were being reported or even fired solely off of the AI tracking software with no human interaction. Drivers for Amazon have complained of the surveillance and pressure they receive through a tracking app, Mentor, and cameras.

With drivers starting at $15 an hour, this rate is far less than the average starting wage for other delivery drivers. Currently, UPS drivers that are represented by the Teamsters Union have their wages start at $21 an hour and go up to $40 an hour or more for experienced drivers.

Drivers have also reported having to urinate in bottles in their delivery vans in order to keep up with delivery rates.